Top tips for using data to showcase return on investment in a benefits strategy

ROI in benefits

Need to know:

  • With the range and availability of benefits increasing, and sources of data growing, employers must consider how to best harness data to showcase the value of benefits spend.
  • Using a multi-layered approach to highlight pain points or areas of interest, and measuring data around these, will help to ensure organisations gather the most relevant data.
  • Rather than presenting raw data, creating a story around key business performance metrics will help make the case for benefits spend.

The number of workplace benefits provided by employers has increased by 160% in the past four years, according to research published by job site Indeed in January 2020. Organisations are increasingly focused on ensuring that they have an effective benefits strategy in place to boost productivity, engagement, and increase their chances in talent acquisition. 

As with any aspect of business, however, spending time and money has to be seen as a worthwhile investment; in years gone by, concepts such as ‘satisfaction’, ‘wellbeing’ and ‘engagement’ might have meant that HR teams hit a wall when trying to justify benefits spend.

Now, however, employers not only understand more clearly how these topics are linked to business performance, but the data to measure and evaluate this link has also become a reality.

So, how can employers best harness quantitative data to solidify the case for spending time and resources on a benefits strategy?

Use the right data 

Gathering data is crucial to building an effective benefits strategy, as it can showcase the positive effects that benefits are have and identify problem areas. In a world where data can be drawn from anywhere, however, it is important for an employer to understand what it is looking to measure. 

Louise Jones, people adviser at Perkbox, says: “When it comes to gathering the right data to show return on investment [ROI] on benefits, the first step is to consider what this looks like to [the] business. If usage is important and not many people are using certain benefits, it may be time to put that budget into something else.

“Maximising the data [employers] have available is getting easier today, especially as benefits providers will often give [them] reports on how well the benefit is being utilised among employees.”

Usage statistics can help employers monitor ROI on a regular basis and understand whether to promote a particular scheme, or perhaps even replace it with something more useful to employees. “For example, at Perkbox, we share usage reports with [employers] on redemption rates for each individual perk so they can gain an insight into their employees’ preferences, be that free coffees, discounted gym membership or shopping discounts,” says Jones.

Employers should also have an understanding of what their employees will value, and what challenges they might face, before gathering information on how effective benefits have been at meeting these needs. For example, if financial wellbeing is high on the employee agenda, tracking trends within anonymised data on employee financial status, debt and stress might help to demonstrate how workplace savings, financial education or employee assistance programmes (EAPs) have addressed a key concern. 

Equally, if looking to boost engagement and motivation, there is little use pumping money into initiatives that do not speak to the preferences of the workforce.

This all means taking a multi-layered approach to data; taking information gathered from, say, employee surveys, to highlight pain points or areas of interest for staff, and using this to influence what data is then gathered in the process of showcasing how these issues are impacted by benefits spend.

Brian Berns, chief executive officer at Knoa Software, says: “Businesses need to develop a detailed understanding, to then look at the overall viewpoint of their employees, in terms of engagement, satisfaction, and the challenges that they face.” 

Map key metrics

Rather than just using raw quantitative data when demonstrating ROI, HR and reward teams should outline which metrics are of utmost importance to the business. 

So, if a key metric of success for a business is employee loyalty, employers could turn to data such as staff turnover rates, absence levels and engagement or satisfaction scores. There are many sources through which organisations can harness this information; this might mean tracking improvements in turnover and employee absence levels, taking pulse satisfaction surveys, or monitoring external scoring sites such as Glassdoor.

These same data sets could be used to illustrate different metrics if looked at from another angle; it is simply about being deliberate and considered in how they are presented.

Chris Bailey, partner, head of corporate at Mercer Marsh Benefits says: “None of the metrics to use are always straightforward; employers need to map out data sets and work out how to apply them.”

Every organisation will have a different aim in mind when determining the ROI of their benefits package, and should bear this end goal in mind rather than focusing on immediate returns, says Bailey. “At the base, if [an employer] can improve the employee experience to the point that they are functioning better, working for longer, and the customer satisfaction levels are improving, that should help employers stray away from the specific case that looks for ROI on benefits.”

Consider aims and values

Employers can also use data to drill down in order to obtain a better understanding of which strategies, out of the plethora of options now available to them, will be most effective for their individual workforce.

Jones says: “This process is important, as data supports a wider conversation around the value of introducing and sustaining benefit offerings in the long run. Getting regular insights into how benefits are being used by employees can also help [employers] understand how they feel and give some insights around their lifestyle preferences.

“These types of initiatives can have a wider impact on the bottom line and boost attraction and retention in [an] organisation.”

However, there is a point at which data and metrics fall short, says Bailey. Instead, modern employers, and the ones with the strongest future ahead of them, see providing for their staff as part of an underlying set of business values, rather than simply a way to gain financial returns.

“If you have organisational values in the way that you treat people, living up to those values is just about being authentic, so it doesn’t need a business case,” he explains. “Wanting to do the right thing in rewarding employees is becoming more common than more of a data-driven approach to reward.”

Read more…

Sign up to our newsletters

Receive news and guidance on a range of HR issues direct to your inbox

OptOut
This field is for validation purposes and should be left unchanged.

Hays uses data to showcase return on benefits platform

Stephen Perkins: Benefits management involves knowing employees’ needs